Information aggregation and expost effi ciency in a large , two - stage , Cournot market ∗

We study a mechanism that resembles a market. There are two main approaches to doing that. One uses a double-auction type of mechanism; the other, which is studied here, uses a Cournot quantity type of mechanism. Our mechanism has two stages and is inspired by pari-mutuel betting. The second stage resembles the determination of final odds and payoffs in pari-mutuel betting. The first stage is a version of the announced running bet totals and odds in pari-mutuel betting. In a model that is essentially a finite-state, divisible-goods version of the private/common values model of Reny-Perry (2006), we show existence of an equilibrium that is almost expost effi cient when the number of players is finite, but large.